An interesting question and one which has the answer – ‘it depends’!
Q: “What portion of my investment level should I consider be ring-fenced off for consultation with franchise-specialist legal consultants”
The cost of a franchise agreement review will vary depending on the firm instructed but, as a guide, a comprehensive review will typically cost in the region of £500 to £750 plus VAT.
What is in a franchise agreement review?
The review will consist of either a face to face meeting or more usually a written report explaining the principal terms of the franchise agreement and identifying any unusual or onerous provisions.
Does it conform?
As a proportion of the typical investment it is a small price to pay for confirmation that the proposed franchise terms conform to industry standards.
Where the prospective franchisee is buying a franchise as a going concern there will be additional legal costs to deal with the business acquisition and assignment of the lease where premises are involved. These costs will vary depending on the complexity of the transaction and it is a good idea to obtain a couple of fee estimates before selecting legal advisors, remembering that good advice does not always come at the cheapest price.